EU or China?

A crane loads containers at a China's port (AFP Photo)

The European Union (EU) may be losing out to China in ASEAN export markets just like in Africa
 because of its insistence on high quality standards even as China and the ASEAN have signed a limited Free Trade Agreement cutting tariffs by 2010 and a Trade Treaty in the services sector.

The EU is negotiating with ASEAN for an FTA but it has many non-tariff issues – like environment protection, labor safeguards, sanitation and food hygiene, human rights. China, on the other hand, comes with no such baggage.

Cecile Leroy, project officer, Economic & Regional Cooperation, of the EU delegation in Indonesia and Brunei Darussalam, told journalists from nine ASEAN countries that since China has been engaged with ASEAN for a long time, the EU cannot compete with it.

However, the EU now is the second largest trading partner after the US for most countries in ASEAN and had a trade turnover of US$550 billion with the bloc last year. China was only the fourth largest partner.

However, China is very active in trying to expand trade.

An FTA between the EU and seven members of the 10-member bloc is expected to be signed in the next two or three years.

An FTA involving China and the six original members of ASEAN is targeted to come into force in 2010. The other four members will come on board in 2015, creating a zero-tariff market of 1.7 billion people,

With the EU continuing to make high demands for cooperation with the region, it might no longer remain ASEAN's second largest partner in the next two years when the FTA between ASEAN and China kicks in.

By Viet Trung

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